Appeals court delays ‘sensible resolution’ meeting between GM, Fiat Chrysler CEOs

DETROIT — Three federal appeals judges have delayed a court-ordered meeting between the CEOs of General Motors and Fiat Chrysler to try to settle a lawsuit over corruption by union leaders.

U.S. District Court Judge Paul Borman last week ordered GM CEO Mary Barra and FCA CEO Mike Manley to meet before July 1. But GM on Friday asked the federal appeals court in Cincinnati to overturn the order and remove Borman from the case.

In an order issued Monday, three appellate judges delayed Borman’s order to provide time to consider legal points raised by GM.

GM is suing crosstown rival FCA alleging that it got an advantage by paying off United Auto Workers union leaders to reduce labor costs during contract talks. FCA’s former labor chief, Al Iacobelli, is in prison, although the company denies that it directed any prohibited payments.

In his order last week, Borman described the lawsuit as a “nuclear option” that would be a “waste of time and resources” for years if he allows the case to move forward.

The judge ordered Barra and Manley to sit down without lawyers by July 1 and reach a “sensible resolution of this huge legal distraction.” Borman wants an update from them on a public video conference that same day. Over the weekend he modified the order to allow lawyers to attend the meeting.

In a court filing, GM called Borman’s order a “profound abuse” of power.

“The court possesses no authority to order the CEOs of GM and FCA to engage in settlement discussions, reach a resolution and then appear alone at a pretrial conference eight days later, without counsel,” GM’s attorneys said.

“Second, the court has no business labeling a properly filed federal lawsuit assigned to the court for impartial adjudication ‘a distraction’ or a ‘nuclear option,’” GM said.

Borman can’t be viewed as impartial, company lawyers said.

The judge declined to comment.

In a court filing Monday, Fiat Chrysler lawyers wrote that GM didn’t make a good case to remove Borman because judges routinely direct lawsuit parties to talk about settling. The lawyers wrote that GM originally wanted the case assigned to Borman but now apparently is worried that his tough questions mean he will dismiss GM’s claims.

“GM should not be permitted now to complain that that judge has turned out to be less hospitable to GM’s claims than GM anticipated. Parties are not permitted to engage in such judge shopping,” the filing said.

Federal agents have been rooting out corruption in the senior ranks of the United Auto Workers. The first wave of convictions in 2017 involved key FCA employees who used money from a jointly run training center to reward union officials.